Part II of a III Part Series e-Procurement: Do-It-Yourself VS 3rd Party Solutions

October 6th, 2009

Mark Davis the Chief Technology Officer (CTO) at SafeSourcing is back today with Part II in this series to discuss the Do it Yourself or DIY approach...

To begin with, the do it yourself approach or build it yourself approach has historically had the perceived benefit of saving a company time and money when compared to offerings consisting of license fees and professional services fees that are associated with a 3rd party solution provider . The prevailing thought historically has been that having existing staff involved in handling this process, company?s will be able to leverage resources that are already in place, and as such save time and money.

With this approach, there is also a sense of having more control of the process when it occurs in-house. Doing it yourself means you can monitor and assure that the process for finding the right suppliers, product specifications and other related tasks are done exactly how the company desires and also feed a development process that is by you and for you. In most cases this means doing things the way you have always done them with a slightly broadened focus for now. For many people, these benefits will be enough to entice them to try themselves rather than contact 3rd party solutions providers.

The potential downside to doing things yourself, however, is that the same resources that are to be leveraged to do this work will need to be compensated for as long as they are in the company?s employment. Likewise they will also need to be given sick days, vacation days, health and other benefits. To go along with an unending expense stream to support this process, there is the possibly that resources once educated will leave the company or be transferred to another job within the company and other resources will need to brought in and trained to do this work as well as a result of the intellectual or knowledge drain.

Another risk of doing it yourself is that the tools that are available to the public, such as internet searching or using the phonebook to find suppliers can be unreliable and time-consuming. And although the internet has a fairly broad view of the world, local directories are very limited in their informational scope. These methods also have no real way to qualify potential suppliers and unless an easy to use tool is created in-house to aid in this process, there is no forum for suppliers to competitively bid real-time in order to win the business other than email and telephony which means that there are potentially thousands of savings dollars lost as well as significant information drain for every category sourced.

The do it yourself approach for some businesses at some times seems like the only viable approach when compared to involving 3rd party solution providers, however, when the added cost and other related risks are added to the mix, many companies have found that the difference in final cost or TCO is very minimal and in many cases higher when compared to the all of the benefits that a 3rd party solution could provide.

In tomorrows post we will explore part III of this blog will cover the 3rd party approach.

We look forward to and appreciate your comments.

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